Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Chapter 5, Problem 5.6E
Purchase Discounts
For each of the following transactions of Buckeye Corporation, prepare the appropriate
July 3: Purchased merchandise on credit from Wildcat Corp. for $3,500.
July 12: Paid amount owed to Wildcat Corp.
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On October 5, your company buys and receives inventory costing $5,400, on terms 2/30, n/60. On October 20, your company pays the amount owed relating to the October 5 purchase.Prepare the journal entries needed on October 5 and 20, assuming the company uses a perpetual system and records purchase discounts using the net method.
On October 5, your company buys and receives inventory costing $5,900, on terms 2/30, n/60. On October 20, your company pays the amount owed relating to the October 5 purchase.Prepare the journal entries needed on October 5 and 20, assuming the company uses a perpetual system and records purchase discounts using the gross method.
Travis Company purchased merchandise on account from a supplier for $12,900, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period.
Under a perpetual inventory system, record the journal entries required for the above transactions.
Chapter 5 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 5 - Merchandise Accounting Merchandise Inventory Raw...Ch. 5 - Inventory Valuation Specific identification method...Ch. 5 - Inventoriable Costs During the first month of...Ch. 5 - Perpetual and Periodic Inventory Systems Following...Ch. 5 - Missing Amounts in Cost of Goods Sold Model For...Ch. 5 - Purchase Discounts For each of the following...Ch. 5 - Working Backward: Gross Profit Ratio Acmes gross...Ch. 5 - Inventory Costing Methods VanderMeer Inc. reported...Ch. 5 - Cost of Goods Sold, FIFO, and LIFO Kramer began...Ch. 5 - Comparison of Inventory Costing Methods—Periodic...
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- Review the following transactions, and prepare any necessary journal entries for Sewing Masters Inc. A. On October 3, Sewing Masters Inc. purchases 800 yards of fabric (Fabric Inventory) at $9.00 per yard from a supplier, on credit. Terms of the purchase are 1/5, n/40 from the invoice date of October 3. B. On October 8, Sewing Masters Inc. purchases 300 more yards of fabric from the same supplier at an increased price of $9.25 per yard, on credit. Terms of the purchase are 5/10, n/20 from the invoice date of October 8. C. On October 18, Sewing Masters pays cash for the amount due to the fabric supplier from the October 8 transaction. D. On October 23, Sewing Masters pays cash for the amount due to the fabric supplier from the October 3 transaction.arrow_forwardPrepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.arrow_forwardTravis Company purchased merchandise on account from a supplier for $9,400, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period. Under a perpetual inventory system, record the journal entries required for the above transactions. a. b.arrow_forward
- A company uses the periodic inventory system and records purchases net of discounts. On April 1, the company purchased merchandise worth P 20,000 under terms 2/10, n/30. The journal entry to be made to record the purchase on April 1 will include a: A. credit to accounts payable of P 20,000 B. debit to purchases of P 20,000 C. credit to accounts payable of P 19,600 D. debit to allowance for purchase discounts of P 400arrow_forwardInstructions Travis Company purchased merchandise on account from a supplier for $5,900, terms 2/10, net 30 on December 26. Travis Company paid for the merchandise on December 31, within the discount period. Required: Under a perpetual inventory system, record the journal entries required for the above transactions. Refer to the Chart of Accounts for exact wording of account titles.arrow_forwardA company uses the periodic inventory system and records purchases net of discounts. On April 1, the company purchased merchandise worth P 20,000 under terms 2/10, n/30. The journal entry to be made to record the purchase on April 1 will include a: credit to accounts payable of P 20,000 debit to purchases of P 20,000 credit to accounts payable of P 19,600 debit to allowance for purchase discounts of P 400arrow_forward
- Journalize the following transactions for Miller Company using the gross method of accounting for purchase discounts. Assume a perpetual inventory system. April 9 Purchased goods from Jackson Company on account, $7,500, terms 4/10, n/30. April 15 Returned merchandise to Jackson Company that was previously purchased on account, $525. April 20 Paid the amount due to Jackson Company. Date: Account Title Debit Credit Rarrow_forwardOn December 22, Travis Company purchased merchandise on account from a supplier for $7,500, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period on December 31. Required: Under a perpetual inventory system, record the journal entries required for the above transactions. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS Travis Company General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Merchandise Inventory 131 Estimated Returns Inventory 140 Supplies 142 Prepaid Insurance 180 Land 190 Equipment 191 Accumulated Depreciation LIABILITIES 210 Accounts Payable 216 Salaries Payable 221 Sales Tax Payable 222 Customers Refunds Payable 231 Unearned Rent 241 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE…arrow_forwardTravis Company purchased merchandise on account from a supplier for $6,800, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period. Under a perpetual inventory system, record the journal entries required for the above transactions. If an amount box does not require an entry, leave it blank. a.arrow_forward
- Prepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system. September 15 Purchased merchandise with an invoice price of $35,000 and credit terms of 2/5, n/15. September 29 Paid supplier the amount owed on the September 15 purchase.arrow_forwardPrepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system. Sep. 15 Purchased merchandise with an invoice price of $35,000 and credit terms of 2∕5, n∕15. 29 Paid supplier the amount owed on the September 15 purchase.arrow_forwardComplete the journal entries for the following transactions: On August 1, 2019 XYZ Company sold merchandise on account for $25,000 with a cost of $15,000 using the perpetual inventory system, with the terms 2/10, n/30. There are two entries which includes first a [Select] to Accounts Receivable for [Select] [Select] It also includes a debit to [Select] credit to [Select] and a [Select] [Select] [Select] for [Select] # for [Select] for [Select] for [Select] On August 7, 2019, XYZ Company received payment from the customer. The entry would include a debit to [Select] for [Select] , another debit to to Sales for and a and a credit toarrow_forward
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